Ackman's Year Of Living Dangerously Get Worse - The Herbalife Timeline (Audit Complete With No Material Changes)Submitted by Tyler Durden on 12/16/2013 15:21 -0500
UPDATE: Herbalife is halted for the following news:
- HERBALIFE COMPLETES RE-AUDIT FOR FISCAL '10 '11, '12
- HERBALIFE NO MATERIAL CHANGES TO 2010, 2011 OR 2012 FINL
Which opens the doors for the substantial buyback they have planned. We suspect one can hear a pin drop in Pershing Square's headquarters.
Herbalife has re-opened up 9% over $75 on very heavy volume - It seems Ackman's "end of the earth" bet may take a little longer...
This week marks the one-year anniversary of Bill Ackman’s 342-page slide presentation at the Ira Sohn Conference in NYC. At that time he publicly disclosed his $1 billion short bet against Herbalife (HLF), accusing the company of being a pyramid scheme and claiming its stock was destined to fall to zero once regulators stepped in. As everyone knows, HLF shares plummeted, losing nearly half their value in the three days after the presentation. The market’s initial response did not last, and HLF is up about 160% since its 12/21/12 low of $26.06 (vs S&P 500 +24%). Pershing Square’s public campaign has taken many forms, as Barclays outlines below...
Now that the CapEx drought has become a mainstream topic, it bears reminding that this phenomenon will continue indefinitely, and certainly as long as CapEx hurdle rates are far greater than issuing a low-yielding bond and using the proceeds to reward shareholders: indeed, this shareholders friendly topic has been perhaps the dominant theme of 2013 when activist investors stormed to the forefront once again, most prominently in the face of Carl Icahn, and have managed to force even lower revenue growth prospects by levering companies with debt loads that are now greater than during the prior credit bubble peak. Naturally, one after another bank has come out once again, as they did, and is predicting that the great deferred CapEx renaissance is upon us... any day now. Unfortunately, it isn't. And just to confirm this, here is Archer Daniels Midland summarizing the company's plans for its 2014 free cash flows. In short: they don't involve any US growth CapEx spending at all.
- U.S. set to adopt Volcker rule to curb bank trading gambles (Reuters) After vote, lawsuits likely next hurdle for Volcker rule (Reuters)
- U.S. Congress budget talks could produce Tuesday deal, aides say (Reuters)
- Wealthy Go Frugal This Holiday Amid Uneven U.S. Recovery (BBG)
- Tearful Thai PM urges protesters to take part in election (Reuters)
- Fed’s Bullard Sees Higher QE Taper Odds as Labor Market Improves (BBG)
- Coeure Says ECB Would Offer More LTROs Only When Banks Can Lend (BBG)
- Inside China's Super-Sterile Chicken Farms (WSJ)
- Mandela Service Rivals JFK’s as Leaders Meet in South Africa (BBG)
- China data defy slowdown forecasts (FT), and of course the word is "data"
- Cold, ice grip U.S. as more snow to blanket East (Reuters)
It would be tragic if it wasn't so hilarious. Nearly a year after we first suggested that Herbalife is the long of 2013, as a result of the epic short squeeze potential resulting from the Ackman announcement of his mega short,(promptly followed by the traditional Whitney Tilson piggyback) which it has been, rising from $25 to an all time high of $77.39 days ago, Herbalife has had enough of the so-called retail expert's (coughJCPcough) repeated allegations of fraud, and after taking a well-deserved victory lap costing Ackman hundreds of millions, has decided to hit him where it truly hurts - his clients. Bloomberg reports that Herbalife is approaching investors in Ackman’s hedge fund, suggesting they pull their money from the $12 billion firm.
Following Kyle Bass' earlier comments on Herbalife's ability to tap the capital markets for a major buyback: HERBALIFE WILL BE ABLE TO BORROW AS MUCH AS $2B, BASS SAYS; An HLF spokesperson has noted that Carl Icahn will not be selling (following the stock's close above a key level that enables him to sell). This has sent the stock to $77.39 - an all-time high. HERBALIFE SAYS ICAHN HAS NO PRESENT INTENTION TO SELL SHARES. We can only imagine how Ackman feels as day after day of theta is sucked out of his puts...
- Winter storm lashes eastern U.S., threatens Thanksgiving travel (Reuters)
- Fed Reveals New Concerns About Long-Term U.S. Slowdown (BBG)
- Private equity keeps $789bn of powder dry (FT) - because they are "selling everything that is not nailed down"
- Merkel and SPD clinch coalition deal two months after vote (Reuters)
- Japan approves new state secrecy bill to combat leaks (BBC)
- CLOs are the new black: Volatile Loan Securities Are Luring Fund Managers Again (WSJ)
- Health website deadline nears (WSJ)
- Norway Debates $800 Billion Wealth Fund’s Investment Options (BBG)
- Set of global trade deals stalls (WSJ)
- Berlusconi To Learn Fate In Senate (Sky)
- Silvio Berlusconi withdraws support from Italy’s government (FT)
We earlier discussed Bill Ackman's lengthy interview on Bloomberg TV during which he faced up to the $500 million losses (more now) from his Herbalife position, and that it is "not a trade" for him but "will take it to the ends of the earth." However, it seems his comments that "Herbalife longs are all 80-year-old billionaires" pissed off Carl Icahn enough to warrant his wrath. Icahn called in to Trish Regan and exclaimed, "I fail to understand how Bill Ackman, whom I haven’t spoken to for years, nor do I intend to speak to, would know what I am or am not committed to. I continue to believe Herbalife has a great future, and in my opinion many of the things Ackman says about it are simply the rantings of a sore loser." The stock remains +5% and back near recent record highs.
It's Bullard's Turn To Pour Cold Water On Stock Ramp, Says December Taper Possible, Considers Negative Rates As WellSubmitted by Tyler Durden on 11/20/2013 10:39 -0500
First it was Carl Icahn, then Larry Fink, and now it is Fed "bellwether" Bullard who take the ECB's NIRP and doubles down with a "Taper"
- BULLARD WOULD LIKE STUDY OF NEGATIVE RATE FOR EXCESS RESERVES
- BULLARD SAYS THINGS ARE LOOKING BETTER
- BULLARD SAYS JOBS PICTURE LOOKING BETTER
- BULLARD SAYS QUESTION IS WHETHER JOBS PICKUP SUSTAINABLE
- BULLARD SAYS A STRONG JOBS REPORT FOR NOVEMBER WOULD INCREASE PROSPECT TO TAPER IN BOND BUYING IN DECEMBER
Yeah, everyone is falling for that one again. Sure. For now however, EURUSD is buying it, and is down 100 pips on the combined action of the NIRP rumor and the possibilty of a December Taper.
Yesterday it was Carl Icahn explaining some uncomfortable truths to the mainstream media (who rapidly turned their cognitively dissonant backs on his status quo defying statements). Today, it is uber-bull Larry Fink's turn to unleash truth-hell...
- *FINK SAYS PENSION FUNDS TO START SELLING STOCKS TO REBALANCE
- *FINK SAYS STRUCTURAL UNEMPLOYMENT GROWING
- *FINK SAYS QE NOT HELPING WITH STRUCTURAL UNEMPLOYMENT
- *FINK SAYS CENTRAL BANKS' POWERS TO CREATE JOBS LIMITED
His remarks - coinciding with Europe's close and the end of POMO (and this EURJPY's levitation) has knocked half of this morning's gains off stocks...
It is time for the centrally-planned markets to "try" for the round number trifecta of 16000, 1800 and 4000 again, although it may be a tad more difficult on a day in which there is no double POMO and just $2.75-$3.50 billion will be injected by the NY Fed into the S&P - perhaps it is Bitcoin that will hit the nice round number of $1000 first? Overnight, the Chinese Plenum news rerun finally was priced in and the SHComp closed red, as did the Nikkei 225 as the Asian euphoria based on communist promises about what may happen by 2020 fades. What's worse, the Chinese 7-day repo rate is up 140bp this morning to 6.63% amid talk of tightening domestic liquidity conditions, and back to levels seen during the June liquidity squeeze. All this is happening as China continues leaking more details and hope of what reform the mercantilist country can achieve, and how much internal consumption the export-driven country can attain: overnight there were also additional reports of interest rate liberalization and that the PBOC are to set up a floating CNY rate. Good luck with that.
"Reuters was completely accurate that I am concerned about the level of the market. But I also made it clear on the conference call (and I believe as Reuters reported it), that it is almost impossible to predict what a market will do in the short term. There are too many variables." - Carl Icahn
Carl Icahn, who is currently speaking at the Reuters Global Investment Outlook Summit, just poured cold water over the Fed's 16,000 DJIA EOD price target.
ICAHN: ‘VERY CAUTIOUS ON EQUITIES, MARKET COULD EASILY HAVE BIG DROP'
ICAHN SAYS MANY COS. EARNINGS ARE A ‘MIRAGE,’ REUTERS SAYS
ICAHN: DOESN’T WANT FIGHT WITH APPLE,NO PLANS TO WALK AWAY
But... but.. two POMOs... Still, not too late for K-Fed and his merry unlimited balance sheet trading men to pull a record third POMO today and keep the "wealth effect" illusion going. Was it just a month ago that we warned "Carl Icahn's nightmare" was about to occur? - as the credit market became saturated...
- China Pledges Greater Role for Market in Economy (WSJ), China vows 'decisive' role for markets, results by 2020 (Reuters)
- China expected to cut growth target to 7% (FT)
- World Trade Center Tower Debuts in Manhattan Leasing Test (BBG)
- Job Gap Widens in Uneven Recovery (WSJ)
- Khamenei’s conglomerate thrived as sanctions squeezed Iran (Reuters)
- Swiss referendum on wages of high earners stirs debate (FT)
- Obama to Nominate Massad to Head CFTC (WSJ)
- Japan readies additional $30 billion for Fukushima clean-up (Reuters)
- Target Fills Its Cart With Amazon Ideas (WSJ)
- Shadow banks reap Fed rate reward (FT)
- Philippines Left Reeling in Wake of Storm (WSJ)
- Khamenei controls massive financial empire built on property seizures (RTRS)
- Race to Bottom Resumes as Central Bankers Ease Anew (BBG)
- U.S. Postal Service to deliver Amazon packages on Sundays (LA Times)
- Obama Stocks Among Best After Re-Election as Rally Tested (BBG)
- Health-Law Rollout Weighs on Obama's Ratings, Agenda (WSJ)
- Twitter in Celebrity Spat With Facebook as Rivalry Builds (BBG)
- Iran deputy industry minister shot dead (AFP)
- Financier of Taliban-linked group shot dead in Pakistan (RTRS)
- Obama: The Lonely Guy (Vanity Fair)
Gross: All risk asset prices artificially high. When won’t they be? When they don’t produce growth in real economy. Is 2% GDP enough?
— PIMCO (@PIMCO) October 29, 2013